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In 2015, the Controller of ABC Company discovered the following errors (all material) related to the 2014 and 2013 financial statements: 1. Ending inventory


  

In 2015, the Controller of ABC Company discovered the following errors (all material) related to the 2014 and 2013 financial statements: 1. Ending inventory at the end of 2013 was understated by $10,000 2. In 2014 a $2000 purchase was incorrectly recorded as a $22,000 purchase. The invoice has not yet been paid 3. Inventory at the end of 2014 was overstated by $30,000. ABC uses the periodic inventory system. Assume errors were discovered after the 2014 financial statements were issued. Analyze the impact of the errors on cost of goods sold, net income, and retained earnings. Ignore income taxes.

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